PART A - Pricing Strategy

In year one, the price for the training course in diskette, and cd form has been set at $67.49 plus $6.73 shipping & handling. The product in Internet form will sell for $67.49 with no shipping and handling charges. In year two and three, the Company will lower its price to $60.74 plus $8.08 shipping and handling on the product in diskette and cd form and to $60.74 with no shipping and handling charges on the product in Internet form. For simplicity, our remaining presentation will use the term "Software" to represent our product in diskette, cd, and Internet form.

The software price has been established using the competitor based pricing approach. With this approach, a company bases its price largely on competitor's prices, with less attention paid to its own costs and demand. In our case, we plan to charge approximately half the price of rival competitors.

The price for the business course in hard-copy form has been set at $299.99 and is expected to remain constant over the three year forecasted period. J&B used the cost based pricing strategy when setting its price for the product in hard copy form. Moreover, we considered all costs to produce and sell the product in hard copy form and added a 100% mark-up.